Wood Business

Industry News Markets
Weyerhaeuser reports third quarter 2017 results

Oct. 27, 2017 - Weyerhaeuser Company (NYSE: WY) has reported third quarter net earnings of $130 million, or 17 cents per diluted share, on net sales of $1.9 billion. This compares with earnings from continuing operations of $162 million, or 21 cents per diluted share, on net sales of $1.7 billion for the same period last year. Adjusted EBITDA for the third quarter was $569 million compared with $434 million for the third quarter of last year. 

Excluding after-tax special charges of $129 million, primarily comprised of previously announced charges for product remediation, the company reported net earnings of $259 million, or 34 cents per diluted share for the third quarter. This compares with net earnings from continuing operations before special items of $172 million for the same period last year and $212 million for the second quarter of 2017.

"I am very pleased with our third quarter performance, as each of our businesses delivered strong operating results despite various weather-related challenges in the quarter," said Doyle R. Simons, president and chief executive officer. "We also continued to simplify our business and strategically optimize our timberland portfolio by completing the sale of our Uruguay operations, and we redeemed our interest in the Twin Creeks joint venture in October. Looking forward, we remain focused on driving value for shareholders by delivering continued operational improvements and capturing the full benefit of improving market conditions."

TIMBERLANDS

FINANCIAL HIGHLIGHTS (millions)

2Q 2017




3Q 2017




Change

Net sales

$632




$670




$38

Contribution to pre-tax earnings

($12)




$131




$143

Pre-tax charge for special items

$147




$0




($147)

Contribution to pre-tax earnings before special items

$135




$131




($4)

Adjusted EBITDA

$222




$220




($2)

3Q 2017 Performance - In the West, higher average sales realizations for domestic and export logs were more than offset by lower fee harvest volumes due to fire season related logging restrictions. In the South, log sales volumes increased, and average sales realizations were comparable to the second quarter, as slightly higher sawlog pricing was offset by a higher proportion of pulpwood sales. Forestry costs increased slightly.

4Q 2017 Outlook - Weyerhaeuser expects higher earnings and Adjusted EBITDA in the fourth quarter compared with the third quarter. In the West, the Company anticipates increased fee harvest volumes and slightly higher average log sales realizations, partially offset by higher road spending.  In the South, the company anticipates slightly higher fee harvest volumes, more than offset by higher forestry expense due to weather-related deferral of third quarter activities. Average log sales realizations should be comparable to the third quarter.

REAL ESTATE, ENERGY & NATURAL RESOURCES

FINANCIAL HIGHLIGHTS (millions)

2Q 2017




3Q 2017




Change

Net sales

$46




$82




$36

Contribution to pre-tax earnings

$23




$47




$24

Adjusted EBITDA

$37




$74




$37

3Q 2017 Performance - Earnings and Adjusted EBITDA increased compared with the second quarter due to seasonally higher Real Estate sales. Energy & Natural Resources royalties decreased slightly.

4Q 2017 Outlook - Weyerhaeuser expects significantly higher earnings and Adjusted EBITDA in the fourth quarter compared with third quarter. The company anticipates full year Adjusted EBITDA for the Real Estate, Energy & Natural Resources segment will be approximately $250 million.

WOOD PRODUCTS

FINANCIAL HIGHLIGHTS (millions)

2Q 2017




3Q 2017




Change

Net sales

$1,293




$1,299




$6

Contribution to pre-tax earnings

$177




$40




($137)

Pre-tax charge for special items

$61




$201




$140

Contribution to pre-tax earnings before special items

$238




$241




$3

Adjusted EBITDA

$274




$278




$4

3Q 2017 Performance - Average sales realizations improved compared with the second quarter, with oriented strand board realizations increasing 11 percent. Sales volumes for most products decreased slightly, operating rates declined, and per unit manufacturing costs increased due to downtime from fire season related operating constraints and planned maintenance.

Third quarter results include pre-tax special charges of $201 million, which are comprised of $190 million for product remediation, $6 million for a non-cash impairment and $5 million for softwood lumber countervailing and antidumping duties.

4Q 2017 Outlook - Weyerhaeuser anticipates fourth quarter earnings and Adjusted EBITDA will be comparable to the third quarter. The company expects modestly higher average sales realizations for lumber and oriented strand board will be partially offset by slightly higher Western log costs.  In engineered wood products, the company anticipates seasonally lower sales volumes, higher input costs, and increased per unit manufacturing costs due to planned seasonal and maintenance downtime.